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Taxation (Sec B)
Chapter - 5

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 Chapter-5

Exemptions from GST

1. Exempt supply means supply of any goods or services or both which attracts nil rate of
tax and which may be wholly exempt from tax, but excludes non-taxable supply. Discuss
the validity of the statement.

Answer- The statement is not fully valid in law. Exempt supply has been defined as supply of
any goods or services or both which attracts nil rate of tax or which may be wholly exempt
from tax and includes non-taxable supply [Section 2(47)].

2. Services provided by an entity registered under section 12AB of the Income-tax Act,
1961 are exempt from GST if such services are provided by way of charitable activities.
Elaborate the term ‘charitable activities’.

Answer-The term ‘charitable activities’ mean activities relating to-

(i) Public health by way of-

(A) Care or counseling of

(I) terminally ill persons or persons with severe physical or mental disability;

(II) Persons afflicted with HIV or AIDS;

(III) Persons addicted to a dependence-forming substance such as narcotics drugs or alcohol;

or

(B) Public awareness of preventive health, family planning or prevention of HIV infection;

(ii) Advancement of religion, spirituality or yoga;

(iii) Advancement of educational programs/skill development relating to,-

(A) Abandoned, orphaned or homeless children;

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(B) Physically or mentally abused and traumatized persons;

(C) Prisoners; or

(D) Persons over the age of 65 years residing in a rural area;

(iv) Preservation of environment including watershed, forests & wildlife.

3. Examine which of the following independent services are exempt from GST:

(a) Food supplied by the canteen run by a hospital to the in-patients as advised by the
doctors.

(b) An RWA in a housing society, registered under GST, collects the maintenance charges
of Rs. 6,500 per month per member.

Answer-(a) Services by way of health care services by a clinical establishment, an authorized

medical practitioner or Para-medics are exempt from GST.

Food supplied to the in-patients by a canteen run by the hospital, as advised by the
doctor/nutritionists, is a part of composite supply of healthcare and not separately taxable.
Thus, said services are exempt from GST.

(b) Supply of service by a RWA (unincorporated body or a non-profit entity registered under
any law) to its own members by way of reimbursement of charges or share of contribution
up to an amount of Rs. 7500 per month per member for providing services and goods for
the common use of its members in a housing society/a residential complex are exempt from
GST. Hence, in the given case, services provided by the RWA are exempt from GST since the
maintenance charges collected per month per member do not exceed Rs. 7500.

4. An individual acts as a referee in a football match organized by Sports Authority of

India. He has also acted as a referee in another charity football match organized by a local

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sports club, in lieu of a lump sum payment. Discuss whether any GST is payable on the
activities undertaken by him.

Answer-Services provided to a recognized sports body by an individual, inter alia, as a

referee in a sporting event organized by a recognized sports body is exempt from GST.

Since in the first case, the football match is organized by Sports Authority of India, which is a
recognized sports body, services provided by the individual as a referee in such football
match will be exempt.

However, when he acts as a referee in a charity football match organized by a local sports
club, he would not be entitled to afore-mentioned exemption as a local sports club is not a
recognized sports body and thus, GST will be payable in this case.

5. RXL Pvt. Ltd. manufactures beauty soap with the brand name ‘Forever Young’. RXL Pvt.
Ltd. has organized a concert to promote its brand. Ms. Ahana Kapoor, its brand
ambassador, who is a leading film actress, has given a classical dance performance in the
said concert as a part of her services as a brand ambassador of the company. The
proceeds of the concert worth Rs. 1, 20,000 will be donated to a charitable organization
by Ms. Ahana.

Examine whether Ms. Ahana Kapoor will be required to pay any GST for classical dance
performance given in the said concert.

Answer-Services by an artist by way of a performance in folk or classical art forms of (i)

music, or (ii) dance, or (iii) theatre, are exempt from GST, if the consideration charged for
such performance is not more than Rs. 1, 50,000.

However, such exemption is not available in respect of service provided by such artist as a
brand ambassador.

Since Ms. Ahana Kapoor is the brand ambassador of ‘Forever Young’ soap manufactured by
RXL Pvt. Ltd., the services rendered by her by way of a classical dance performance in the
concert organized by RXL Pvt. Ltd. To promote its brand will not be eligible for the above-

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mentioned exemption and thus, be liable to GST. The fact that the proceeds of the concert
will be donated to a charitable organization by Ms. Ahana will not have any bearing on the
eligibility or otherwise to the above-mentioned exemption.

6. Examine whether GST is exempted on the following independent supplies of services:

(i) Service provided by a private transport operator to Scholar Boys Higher Secondary
School by way of transportation of students to and from the school.

(ii) Services provided by way of vehicle parking to general public in a shopping mall.

Answer-(i) Yes. Services provided TO an educational institution by way of transportation of

students are exempted from GST.

(ii) No. Services provided by way of vehicle parking to general public are not exempted from
GST. Therefore, GST is payable on the same.

7. A State Transport Undertaking has hired motor vehicles meant to carry 8 – 10

passengers from Fast Cab Renting, a motor vehicle renting company. Give your comments
as to whether any GST is payable in this case.

Answer-Services by way of giving on hire, inter alia, to a State Transport Undertaking; a

motor vehicle meant to carry more than 12 passengers is exempt from GST.

Since the motor vehicles given on hire by Fast Cab Renting to the State Transport
Undertaking are meant to carry 8-10 passengers, the same would not be eligible for
exemption and would thus, be liable to GST.

8. Indiana Engineering College, an educational institution, has conducted an entrance test

examination for various courses run by it (for obtaining qualification(s) recognized by law

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for the time being in force) and charged. Entrance fees from the applicants. Determine
whether Indiana Engineering College is liable to pay GST on the same.

Answer-Services provided by an educational institution by way of conduct of entrance

examination against consideration in the form of entrance fee are exempt from GST.

Since in the given case, services provided by Indiana Engineering College –an educational
institution - are by way of conduct of entrance examination against entrance fee, the same
is exempt and thus, GST is not payable in this case.

9. Babloo Transporters, a Goods Transport Agency, transported relief materials in a goods

carriage meant for victims of Kerala floods, a natural disaster, by road from Delhi to
Ernakulum, for a company. Babloo Transporters is of the view that it is not liable to pay
GST on the said services provided as said services are exempt. You are required to advise
it on the said issue.

Answer-Services provided by a goods transport agency, by way of transport in a goods

carriage of relief materials meant for victims of, inter alia, natural or man-made disasters,
calamities, are exempt from GST. Therefore, services provided by Babloo Transporters will
be exempt from GST.

10. Keyan Enterprises, an event organizer, provided services to Breathing Wall Ltd. by way
of organizing business exhibition in New Delhi as part of Make in India initiative. Keyan
Enterprises claims that it is not required to pay GST as the services provided by way of
organizing business exhibition are exempt from GST. Examine the technical veracity of the
claim of Keyan Enterprises, in the given case.

Answer-No, the claim made by Keyan Enterprises that it is not required to pay GST is not
correct. Services provided by an organizer to any person in respect of a business exhibition
are exempt from GST only when such business exhibition is held outside India. However,

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since in the given case, the exhibition is being organized in India, the services of organization
of event by Keyan Enterprises will not be exempt from GST.

11. ST Ltd. has given on hire 5 trucks to Titu Transporters of Delhi (a goods transport
agency) for transporting goods in Central and West Delhi. The hiring charges for the trucks
are Rs. 7,500 per truck per day. Examine whether GST is payable in the given case.

Answer-GST is not payable in case of hiring of trucks to Titu Transporters since services by
way of giving on hire, inter alia, to a goods transport agency, a means of transportation of
goods are exempt.

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